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Dangerous friendship
The practice of taking action against price fixing should be improved, and the relative draft law has been sent to the State Duma. A round-table discussion group discussed whether amendments to the anti-cartel article 178 of the Criminal Code of the Russian Federation would help in holding violators liable for their actions.
The need to reform the law is related to the fact that cartels are very rarely identified, and it is even less likely that participants are brought to justice. The drafted document is intended to eliminate the loopholes in the law that violators use to avoid being held liable. Pursuant to current legal precedents, the current draft of the law allows reviewing such violations of competition law as cartel agreements and repeated abuse of a dominant position, while, in practice, large market players are not always the ones guilty of price fixing. Current practice has shown that it is not price fixing or repeated abuse of a dominant position that are prosecuted, but, rather that these actions have led to limiting or eliminating competition. Therefore, there are doubts today that price fixing in and of itself is a crime. The amendments clarify that a cartel agreement is one of the most dangerous infringements in the economy.
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The anti-monopoly authorities could not only analyse illegal agreements more thoroughly and uncover violations supported by evidence for prosecution, they could also protect businesses from the illegal use of competition law. There is an opinion in the business community that the current competition law permits the pressuring of companies. “If the law enforcement authorities are able to initiate criminal proceedings, then this will be actively used against businesses; and, until the FAS is the only body permitted by law to initiate criminal proceedings against price fixing, this matter will not be resolved”, believes Yaroslav Kulik, Head of Competition at ART DE LEX and deputy director of the non-profit National Association of Purchasing Institutes.
According to the round table, a two-tiered process for reviewing cartel matters – first by the anti-monopoly body, then by the courts – will improve the effectiveness of holding violators liable. However, several participants voiced doubts that article 178 of the Criminal Code will help in this respect, given that there have been numerous efforts to reform this article, but this has not resulted in liquidating price fixing.
The need to reform the law is related to the fact that cartels are very rarely identified, and it is even less likely that participants are brought to justice. The drafted document is intended to eliminate the loopholes in the law that violators use to avoid being held liable. Pursuant to current legal precedents, the current draft of the law allows reviewing such violations of competition law as cartel agreements and repeated abuse of a dominant position, while, in practice, large market players are not always the ones guilty of price fixing. Current practice has shown that it is not price fixing or repeated abuse of a dominant position that are prosecuted, but, rather that these actions have led to limiting or eliminating competition. Therefore, there are doubts today that price fixing in and of itself is a crime. The amendments clarify that a cartel agreement is one of the most dangerous infringements in the economy.
<...>
The anti-monopoly authorities could not only analyse illegal agreements more thoroughly and uncover violations supported by evidence for prosecution, they could also protect businesses from the illegal use of competition law. There is an opinion in the business community that the current competition law permits the pressuring of companies. “If the law enforcement authorities are able to initiate criminal proceedings, then this will be actively used against businesses; and, until the FAS is the only body permitted by law to initiate criminal proceedings against price fixing, this matter will not be resolved”, believes Yaroslav Kulik, Head of Competition at ART DE LEX and deputy director of the non-profit National Association of Purchasing Institutes.
According to the round table, a two-tiered process for reviewing cartel matters – first by the anti-monopoly body, then by the courts – will improve the effectiveness of holding violators liable. However, several participants voiced doubts that article 178 of the Criminal Code will help in this respect, given that there have been numerous efforts to reform this article, but this has not resulted in liquidating price fixing.